Arkansas FHA 203k Program Highlights
The FHA 203k loan program has become popular with the decline in the housing market. When a property is owned by the bank or investment company, chances are that the property may be in need of a little work and the FHA 203k streamline program is a great option.
Just a few of the questions that many people ask about the FHA 203k streamline program include:
What exactly is an FHA 203k loan?
The FHA 203k mortgage is a rehabilitation loan that works much like a construction loan. The person buying the home is able to acquire a home that is in need of repairs and is able to mortgage the repair work in the mortgage to fix items in the house. The FHA 203k mortgage loan consists of the purchase price of the home plus the construction costs for the work to be performed after close.
A Simple Example:
$100,000 purchase price of home
$20,000 Repairs Needed (see a list of the most common FHA 203k repairs)
$120,000 Total Loan Amount
How does the sales contract work for the FHA 203k loan?
The offer is the purchase price of the house only. Do not include the cost of repairs anywhere in the sales contract or offer. In the above example, the purchase price on the sales contract or offer would be $100,000.
FHA 203k loans: are they easier to qualify for than a regular FHA loan?
The requirements to qualify are the same as a traditional FHA loan. What does it take to qualify for an FHA loan? Generally speaking, a credit score above 620, a good job and a down payment of 3.5%. Of course there are more details to being qualified, but those are the basic requirements.
How do I find a contractor to do the repairs?
It is really useful that you work with a general contractor that can perform all whatever repair work is needed. Your loan officer can easily help recommend one – they will need to know at least one good contractor. It is also really important that the contractor be knowledgeable in FHA guidelines so that they can include any FHA required items in their contract.
Arkansas FHA 203k Loan: Ask The Experts
Getting help with your FHA 203k loan locally here in Arkansas is easy, simply get started below and completing your information. A FHA 203k expert will be in touch and be able to answer all of your questions.